Exhibit 99.1
Premiere Global Reports Second Quarter Results: Revenues up 10% to $138.0M;
Cash Provided by Operating Activities up 58% to $22.3M;
$0.21 Pro Forma Diluted EPS from Continuing Operations(a)
Company Increases 2007 Financial Outlook
ATLANTA--(BUSINESS WIRE)--July 26, 2007--Premiere Global Services,
Inc. (NYSE: PGI), a global provider of on-demand business process
improvement solutions, today announced results for the second quarter
ended June 30, 2007.
Revenues
Consolidated revenues in the second quarter of 2007 increased
approximately 10% to $138.0 million compared to $125.6 million in the
second quarter of 2006. Consolidated revenues from the Premiere Global
Communications Operating System's six solution sets increased
approximately 17.5%, excluding revenue from legacy broadcast fax in
both periods.(a)
GAAP Earnings
In the second quarter of 2007 in accordance with GAAP, operating
income totaled $11.2 million, income from continuing operations
totaled $5.8 million and diluted EPS from continuing operations
totaled $0.09, compared to $13.8 million, $6.0 million and $0.09,
respectively, in the second quarter of 2006. These results include the
following items on a pre-tax basis: restructuring costs of $3.9
million, proxy-related costs of $2.0 million, equity-based
compensation of $2.6 million and amortization of $3.6 million. (Please
see reconciliation table attached.)
Pro Forma Earnings
In the second quarter of 2007, excluding restructuring costs,
proxy-related costs, equity-based compensation and amortization, pro
forma diluted EPS from continuing operations totaled $0.21.(a)
Cash Flows
Cash provided by operating activities for the three months ended
June 30, 2007 increased approximately 58% to $22.3 million compared to
$14.1 million for the three months ended June 30, 2006.
"I believe our solid second quarter performance illustrates the
increasing momentum we are generating in our business, as enterprises
worldwide utilize our on-demand communications operating system," said
Boland T. Jones, Founder, Chairman and CEO of Premiere Global
Services, Inc. "The second quarter saw an important milestone for our
Company in the launch of our new Web portal, PGiConnect.com. The
release of this early version of our site marks the beginning of our
transition to an online Company - bringing our entire suite of
solutions and years of domain expertise to the Web.
Looking ahead, we anticipate increasing our focus on this
important initiative through further improvements to the portal,
including additional content that serves to make our solutions
tangible to current and prospective customers. Our goal is to continue
to improve our customer experience, while at the same time driving
increased Web channel sales and lowering our cost of service. We
believe investments in our online strategy will generate meaningful
returns in 2008 and beyond."
Revenue Detail
Revenue from Conferencing solutions grew approximately 26% to
$86.5 million in the second quarter of 2007 compared to $68.6 million
in the comparable prior year quarter. Revenue from legacy broadcast
fax services totaled $20.1 million in the second quarter of 2007, a
decline of $5.2 million as compared to $25.3 million in the second
quarter of 2006.
In the second quarter of 2007, revenue in the Company's reportable
segments was as follows:
-- North America grew approximately 9.8% to $88.1 million, versus
$80.2 million in the second quarter of 2006;
-- Europe increased approximately 4.4% to $25.3 million, versus
$24.3 million in the second quarter of 2006, and;
-- Asia Pacific grew approximately 16.9% to $24.6 million, versus
$21.0 million in the second quarter of 2006.
Six Month Results
Revenues for the six months ended June 30, 2007 were $273.6
million, an increase of approximately 11% compared to $247.3 million
in the six months ended June 30, 2006. Excluding a one-time tax
benefit, restructuring costs, proxy-related costs, equity-based
compensation and amortization, pro forma diluted EPS from continuing
operations for the six months ended June 30, 2007 totaled $0.39.(a)
Financial Outlook
The following statements are based on Premiere Global Services'
current expectations as of July 26, 2007. These statements contain
forward-looking statements and Company estimates, and actual results
may differ materially. The Company assumes no duty to update any
forward-looking statements made in this press release. A discussion
concerning forward-looking statements is included at the end of this
press release and in the Company's filings with the Securities and
Exchange Commission.
The Company's revised financial outlook for 2007 is as follows:
Revenues
The Company now anticipates growth in consolidated revenues for
the year will be above its prior forecast. The Company now projects
consolidated revenues will increase approximately 10% in 2007 from
2006 totals.
Earnings
As a result of expected operating efficiencies from the Company's
initiatives to increase automation, to streamline service delivery and
to consolidate its operations, earnings are projected to grow at a
faster rate than revenues in 2007, when excluding restructuring costs
from both 2006 and 2007.
Cash Flows and Other
Excluding restructuring costs, the Company projects cash provided
by operating activities from continuing operations will grow
approximately 20% in 2007 from 2006 totals.
Capital expenditures are expected to be above the Company's prior
forecast due primarily to increased investment in capacity for the
Company's Conferencing Solutions and Desktop Fax Solutions, as well as
increased investment in the re-engineering of the Company's service
and support organizations. The Company now projects capital
expenditures will be in the range of 8% to 9% of consolidated revenues
in 2007.
(a) To supplement the Company's consolidated financial statements
presented in accordance with GAAP, we have included the following
non-GAAP measures of financial performance: pro forma operating
income, pro forma income from continuing operations and pro forma
diluted EPS from continuing operations. Management uses these measures
internally as a means of analyzing the Company's current and future
financial performance and identifying trends in our financial
condition and results of operations. We have provided this information
to investors to assist in meaningful comparisons of past, present and
future operating results and to assist in highlighting the results of
ongoing core operations. In addition, we present certain consolidated
and solution revenue growth statistics that are derived from non-GAAP
financial measures. Please see the tables attached for calculation of
these non-GAAP financial measures and for reconciliation to the most
directly comparable GAAP measures. These non-GAAP financial measures
may differ materially from comparable or similarly titled measures
provided by other companies and should be considered in addition to,
not as a substitute for or superior to, measures of financial
performance prepared in accordance with GAAP.
Conference Call
The Company will hold a conference call at 5:00 p.m. Eastern this
afternoon to discuss these results. To participate in the call, please
dial-in to the appropriate number 5-10 minutes prior to the scheduled
start time: (800) 289-0533 (US & Canada) or (913) 981-5525
(International). The conference call will be simultaneously broadcast
over the Internet via SoundCast(R), a Premiere Global service, and can
be accessed at PGiConnect.com/IR. You may also follow this link for
details on the Internet replay, podcast and for the text of the
earnings release, including the financial and statistical information
to be presented in the call.
A replay will be available following the call at 8:00 p.m. Eastern
through midnight Eastern August 3, 2007, and can be accessed by
calling (888) 203-1112 (US & Canada) or (719) 457-0820
(International). The confirmation code is 4569401. The Webcast of this
call will be archived on the Company's Website at PGiConnect.com/IR.
About Premiere Global Services, Inc.
Premiere Global Services, Inc. is a global provider of on-demand
communication technologies-based business process improvement
solutions, which we call the Premiere Global Communications Operating
System, or the PGiCOS for short.
Our hundreds of industry specific applications enable businesses
to automate and simplify their business processes and to communicate
more efficiently and effectively with their constituents. We group our
applications into six solution sets: Conferencing, Desktop Fax,
Document Delivery, Accounts Receivable Management, Notifications &
Reminders, and eMarketing.
Today, we deliver our solutions to an established customer base of
over 60,000 corporate accounts, including nearly 80% of the Fortune
500. In 2006, more than 500,000 enterprise users leveraged PGiCOS to
gain a competitive advantage in sales, support and customer service.
With global presence in 19 countries, Premiere Global Services'
corporate headquarters is located in Atlanta, GA. Additional
information can be found at www.PGiConnect.com.
Statements made in this press release, other than those concerning
historical information, should be considered forward-looking and
subject to various risks and uncertainties. Such forward-looking
statements are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and are made based on
management's current expectations or beliefs as well as assumptions
made by, and information currently available to, management. A variety
of factors could cause actual results to differ materially from those
anticipated in Premiere Global Services' forward-looking statements,
including, but not limited to, the following factors: competitive
pressures, including pricing pressures; technological change; the
development of alternatives to our services; market acceptance of our
new services and enhancements; integration of acquired companies;
service interruptions; increased financial leverage; our dependence on
our subsidiaries for cash flow; continued weakness in our legacy
broadcast fax business; foreign currency exchange rates; possible
adverse results of pending or future litigation or infringement
claims; federal or state legislative or regulatory changes; general
domestic and international economic, business or political conditions;
and other factors described from time to time in our press releases,
reports and other filings with the SEC, including but not limited the
"Risk Factors" sections of our Annual Report on Form 10-K for the year
ended December 31, 2006 and our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2007. All forward-looking statements
attributable to us or a person acting on our behalf are expressly
qualified in their entirety by this cautionary statement.
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
--------- --------- --------- ---------
Revenues $138,019 $125,566 $273,645 $247,293
Operating expenses:
Cost of revenues (exclusive
of depreciation shown
separately below) 56,782 49,199 110,678 97,603
Selling and marketing 34,393 33,823 70,861 66,558
General and administrative 17,297 14,852 33,870 28,579
Research and development 3,348 2,844 6,779 5,651
Depreciation 7,226 5,839 14,315 11,766
Amortization 3,593 3,150 7,146 6,246
Restructuring costs 3,877 2,037 3,746 3,090
Net legal settlements and
related expenses 284 - 284 -
--------- --------- --------- ---------
Total operating expenses 126,800 111,744 247,679 219,493
Operating income 11,219 13,822 25,966 27,800
--------- --------- --------- ---------
Other (Expense) Income:
Interest expense (2,604) (2,059) (4,906) (3,902)
Interest income 141 70 241 231
Other, net 215 260 673 27
--------- --------- --------- ---------
Total other (expense) income (2,248) (1,729) (3,992) (3,644)
--------- --------- --------- ---------
Income from continuing
operations before income
taxes 8,971 12,093 21,974 24,156
Income tax expense 3,138 6,087 7,194 10,492
--------- --------- --------- ---------
Income from continuing
operations $ 5,833 $ 6,006 $ 14,780 $ 13,664
========= ========= ========= =========
Net income $ 5,833 $ 6,006 $ 14,780 $ 13,664
========= ========= ========= =========
BASIC AND DILUTED EARNINGS:
Income from continuing
operations $ 5,833 $ 6,006 $ 14,780 $ 13,664
========= ========= ========= =========
Net income $ 5,833 $ 6,006 $ 14,780 $ 13,664
========= ========= ========= =========
BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING: 64,204 69,765 65,941 70,114
========= ========= ========= =========
Basic earnings per share:
Continuing operations $ 0.09 $ 0.09 $ 0.22 $ 0.19
========= ========= ========= =========
Net income $ 0.09 $ 0.09 $ 0.22 $ 0.19
========= ========= ========= =========
DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING: 65,526 70,465 67,190 70,859
========= ========= ========= =========
Diluted earnings per share:
Continuing operations 0.09 $ 0.09 0.22 $ 0.19
========= ========= ========= =========
Net income $ 0.09 $ 0.09 $ 0.22 $ 0.19
========= ========= ========= =========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2007 AND DECEMBER 31, 2006
(IN THOUSANDS, UNAUDITED, EXCEPT SHARE DATA)
June 30, December 31,
2007 2006
------------ ------------
ASSETS
CURRENT ASSETS
Cash and equivalents $ 25,825 $ 18,977
Accounts receivable (less allowances of
$6,586 and $7,551, respectively) 92,250 82,875
Prepaid expenses and other current assets 10,559 7,742
Deferred income taxes, net 11,789 11,972
------------ ------------
Total current assets 140,423 121,566
PROPERTY AND EQUIPMENT, NET 96,405 88,062
OTHER ASSETS
Goodwill 298,005 295,185
Intangibles, net of amortization 32,155 38,357
Deferred income taxes, net 3,387 -
Other assets 5,445 6,145
------------ ------------
$ 575,820 $ 549,315
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 51,219 $ 48,967
Income taxes payable 7,285 878
Accrued taxes 6,199 6,011
Accrued expenses 31,143 28,697
Current maturities of long-term debt and
capital lease obligations 1,755 2,044
Accrued restructuring costs 4,562 4,800
------------ ------------
Total current liabilities 102,163 91,397
LONG-TERM LIABILITIES
Long-term debt and capital lease
obligations 245,552 136,738
Accrued restructuring costs 1,972 2,339
Other accrued expenses 4,158 1,831
Deferred income taxes, net - 719
------------ ------------
Total long-term liabilities 251,682 141,627
SHAREHOLDERS' EQUITY
Common stock $0.01 par value; 150,000,000
shares authorized, 61,751,061 and
70,151,998 shares issued and outstanding
at June 30, 2007 and December 31, 2006,
respectively 618 702
Additional paid-in capital 552,353 663,232
Note receivable, shareholder (2,061) (2,004)
Cumulative translation adjustment 5,289 2,088
Accumulated deficit (334,224) (347,727)
------------ ------------
Total shareholders' equity 221,975 316,291
------------ ------------
$ 575,820 $ 549,315
============ ============
PREMIERE GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(IN THOUSANDS, UNAUDITED)
Six Months Ended
June
2007 2006
---------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 14,780 $ 13,664
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 14,315 11,766
Amortization 7,146 6,246
Amortization of deferred financing costs 258 240
Net legal settlements and related expenses 284 -
Payments for legal settlements and related
expenses - (1,496)
Deferred income taxes (2,640) 65
Restructuring costs 3,746 3,090
Payments for restructuring costs (4,080) (1,821)
Equity-based compensation 5,355 5,103
Excess tax benefits from share-based payment
arrangements 2,297 -
Payments for state sales tax (480) -
Loss on disposal of assets 146 256
Changes in assets and liabilities, net of
effect of acquisitions:
Accounts receivable, net (8,624) (6,778)
Prepaid expenses and other current
assets (486) (954)
Accounts payable and accrued
expenses 10,030 1,855
---------- ----------
Total adjustments 27,267 17,572
---------- ----------
Net cash provided by operating activities
from continuing operations 42,047 31,236
---------- ----------
Payments for discontinued operations (488) (489)
---------- ----------
Net cash provided by operating
activities 41,559 30,747
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (20,240) (18,826)
Business acquisitions, net of cash acquired (1,330) (15,660)
---------- ----------
Net cash used in investing
activities (21,570) (34,486)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under borrowing
arrangements (167,952) (37,976)
Principal proceeds under borrowing
arrangements 275,100 60,100
Excess tax benefits from share-based payment
arrangements (2,297) -
Purchase of treasury stock, at cost (124,458) (19,020)
Exercise of stock options 6,900 1,309
---------- ----------
Net cash (used in) provided by
financing activities (12,707) 4,413
---------- ----------
Effect of exchange rate changes on cash and
equivalents (434) 491
NET INCREASE IN CASH AND EQUIVALENTS 6,848 1,165
---------- ----------
CASH AND EQUIVALENTS, beginning of period $ 18,977 $ 20,508
---------- ----------
CASH AND EQUIVALENTS, end of period $ 25,825 $ 21,673
========== ==========
PREMIERE GLOBAL SERVICES, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, UNAUDITED, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
------------------ ------------------
Revenues Excluding Legacy
Broadcast Fax Revenue (1)
Revenues, as reported $138,019 $125,566 $273,645 $247,293
Excluding legacy broadcast
fax revenue 20,146 25,260 39,732 49,933
--------- -------- --------- --------
Revenues, excluding legacy
broadcast fax revenue $117,873 $100,306 $233,913 $197,360
--------- -------- --------- --------
Pro Forma Operating Income
(2)
Operating income, as
reported $ 11,219 $ 13,822 $ 25,966 $ 27,800
Restructuring costs 3,877 2,037 3,746 3,090
Proxy-related costs 1,989 - 2,900 -
Equity-based compensation 2,580 2,847 5,355 5,103
Amortization 3,593 3,150 7,146 6,246
--------- -------- --------- --------
Pro forma operating income $ 23,258 $ 21,856 $ 45,113 $ 42,239
--------- -------- --------- --------
Pro Forma Income from
Continuing Operations (2)
Income from continuing
operations, as reported $ 5,833 $ 6,006 $ 14,780 $ 13,664
Elimination of one-time tax
adjustments - 1,510 (615) 1,510
Restructuring costs, net of
taxes 2,493 1,316 2,409 1,975
Proxy-related costs, net of
taxes 1,279 - 1,865 -
Equity-based compensation,
net of taxes 1,659 1,768 3,443 3,169
Amortization, net of taxes 2,311 1,956 4,595 3,879
--------- -------- --------- --------
Pro forma income from
continuing operations $ 13,575 $ 12,556 $ 26,477 $ 24,197
--------- -------- --------- --------
Pro Forma Diluted EPS from
Continuing Operations (2)
Diluted EPS from continuing
operations, as reported $ 0.09 $ 0.09 $ 0.22 $ 0.19
Elimination of one-time tax
adjustments - 0.02 (0.01) 0.02
Restructuring costs, net of
taxes 0.04 0.02 0.04 0.03
Proxy-related costs, net of
taxes 0.02 - 0.03 -
Equity-based compensation,
net of taxes 0.02 0.02 0.05 0.04
Amortization, net of taxes 0.04 0.03 0.06 0.06
--------- -------- --------- --------
Pro forma diluted EPS from
continuing operations $ 0.21 $ 0.18 $ 0.39 $ 0.34
========= ======== ========= ========
(1)Management has previously announced the decline of revenue
generated by its legacy broadcast fax services. Management has
presented revenues excluding this item because management believes
that events or trends particular to these services may be deemed
to be so significant to obscure patterns and trends of our core
solutions sets in total.
(2)Management believes that pro forma operating income, pro forma
income from continuing operations and pro forma diluted EPS from
continuing operations provide useful information regarding
underlying trends in our continuing operations. Management expects
equity-based compensation and amortization expenses to be
recurring costs and presents pro forma diluted EPS from continuing
operations to exclude these items as well as non-recurring items
that are unrelated to our ongoing operations, including one-time
tax adjustments, restructuring costs and proxy-related costs.
CONTACT: Premiere Global Reports
Investor Calls
Sean O'Brien, 404-262-8462
Senior Vice President
Strategic Planning & IR